13 Dec Why Robust Risk Profile Questionnaires Are Worth 10.8x The Price You Pay
The chart says it all. Click the link to view and enlarge. ...
Pocket Risk Blog
Helping Financial Advisors Know Their Clients – Risk Profiling, Client Psychology, Behavioral Finance, Compliance 
12 Dec The Best Risk Tolerance Process For Your Clients
Assessing your clients' risk tolerance and overall risk profile (which includes risk capacity, risk needs and behavioral biases) is essential to building suitable portfolios, running an efficient practice and meeting compliance requirements. But what is the ideal way to do it? Tip: It's not just about...
08 Dec Why You Should (And Shouldn’t) Use A Risk Tolerance Questionnaire
All financial advisors collect Know Your Client (KYC) information about their clients. Not only is it a regulatory requirement, it's good business. It helps you build a winning investment approach by requiring you to collect your clients vitals. History Of Risk Questionnaires Unfortunately, as KYC requirements expanded in...
06 Dec Actions For CFPs® To Build Trust With Clients
The Certified Financial Planner Board Of Standards' first principle in its Code of Ethics is integrity. The code states - "Integrity demands honesty and candor which must not be subordinated to personal gain and advantage. Certificants are placed in positions of trust by clients, and the...
05 Dec Why It’s Not Enough To Know A Client’s Risk Tolerance
It’s almost universally accepted by advisors and prescribed by regulators (e.g. FINRA, FCA, and MFDA) that advisors assess a client’s risk tolerance before recommending investments. Knowing how much risk someone is willing to take is essential in building a suitable plan. However, assessing someone’s risk...
02 Dec Are Your Clients Guilty Of The Narrative Fallacy? Are You?
Posted at 10:00h in Quotes
"The narrative fallacy addresses our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship upon them. Explanations bind facts together. They make them all the more easily remembered; they help...
01 Dec 3 Things Your Clients Must Understand Before You Assess Their Risk Tolerance
I recently had a discussion on Facebook with two financial advisors about risk tolerance questionnaires. The advisors expressed their frustrations with managing client behaviour. In one advisor’s words “there is an emotional element that is difficult to quantify” in questionnaires. Pocket Risk helps here but...
30 Nov The Challenges Of Building Technology For Financial Advisors
Headlines like Michael Kitces’ “The Sorry State Of Risk Tolerance Questionnaires” disappoint me but they also motivate. Criticism is how we improve and a new version of Pocket Risk is launching soon. Advisor technology has its challenges. Yet I rarely hear voices from the other...
29 Nov What Is Risk Profiling? Part 2: Let’s Stop Debating Definitions
In my previous article “What Is Risk Profiling – Part 1”, I showed how you can’t talk about, without understanding risk. And that the definition of risk has changed over the centuries due to academic research and human experience. The modern consensus is that risk is...
28 Nov What Is Risk Profiling? Part 1: Over 362 Years Of History
Risk profiling is the process of understanding how much risk is necessary for a client to achieve their financial goals. But this only begs the question – What is risk? The challenge for financial advisors is that the definition of risk keeps changing as research expands. In order...
